Official blog of the Greater Sacramento Progressive Alliance, one of the largest and most vibrant progressive activist groups in California with more than 7,000 members. We mobilize Progressives in Sacramento, the surrounding foothill areas, and at Sac State and Folsom Lake College.

Thursday, December 27, 2012

Republicans Neanderthal place economy at risk

December 26,
2012

Fiscal Endgame : NY. Times.

Just before the Christmas break, negotiations on
the so-called fiscal cliff ended on an absurdist note. House Republicans not
only rejected President Obama’s overly generous budget deal, including his
offer to lift the income threshold for higher tax rates to $400,000 a year from
$250,000, they also
rejected their own leadership’s proposal to raise the threshold for
higher taxes to $1 million and to preserve tax breaks for the heirs of
multimillion-dollar estates.

Most of the fiscal-cliff discussion has focused
on higher income tax rates from the expiration of the Bush-era tax cuts and
automatic across-the-board spending cuts. But failure to reach a deal by
year-end would also bring about deeper and more immediate pain for low- and
middle-income Americans.

No deal means the end of federal unemployment
benefits, averaging $290 a week. Some two million people would be cut off
immediately, and nearly one million more who would be cut off in the first
quarter of 2013. It means the end of the 2 percent payroll tax cut, which, for
the past two years, has reduced taxes for 125 million households, boosting pay
by nearly $1,000 a year for the typical household making $50,000.

It also means the end of improvements in tax
credits for low-income working families, as well as a credit for low- and
middle-income families with college costs, enacted in 2009. If the credits are
pared, some 25 million Americans would lose an average of about $1,000 a year
in benefits in 2013, and roughly eight million children would either fall into
poverty or sink deeper into poverty. The child tax credit for a single mother
working full time at the minimum wage, for instance, would be cut from $1,725
to $165. That would be a huge and shameful step backward.

Failure to resolve the fiscal cliff would also
force 28 million Americans, most of them making between $100,000 and $500,000 a
year, to pay the alternative minimum tax when they file their 2012 tax returns
next year. Their situation is obviously not comparable to that of the working
poor, but it is also unfair. The alternative tax was supposed to apply to
multimillionaires whose tax breaks reduce their tax liability below a level
that is considered a minimum fair share. But, for more than a decade, it has
not operated that way. Rather, superrich Americans have largely escaped the
alternative tax, while those further down the income scale are ensnared —
unless Congress votes to exempt them from the tax that they were never intended
to pay.

With only five days left to make any progress
this year, President Obama
has sensibly called on Congress to pass a scaled-back plan that
would extend the Bush-era tax cuts on incomes below $250,000, suspend the automatic
spending cuts and extend federal jobless benefits. He has also called for a
quick fix to the alternative minimum tax, so that the tax filing season can
proceed without the administrative nightmare of retroactive adjustment.

All that would help to stabilize household
budgets — and the economy, which has shown signs of slowing recently, and
which, in the absence of a deal, has no hope of faster growth in early 2013.

Passage of Mr. Obama’s scaled-back plan would
also buy time to reach a bigger deal later — one that provides additional
government spending to replace the stimulus that will be lost when the payroll
tax cut expires and makes the low-income tax credits permanent, coupled with a higher debt
limit and with deficit reduction that takes place as the economy
recovers.

But if Congress cannot approve a deal by New
Year’s Day, the anticipated sell-off on Wall Street in early January would, one
hopes, force House Republicans to budge.

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Welcome to the PROGRESSIVE ALLIANCE. We are a multi-racial, multi-issue "rainbow coalition" dedicated to social justice, peace and building progressive power. Our key priorities include economic justice; equal rights and equal opportunities for all regardless of race, gender, or sexual orientation; international solidarity; humanitarian service; eradicating poverty at home and abroad; environmental protection and sustainable development; and electing progressives to public office and then holding them accountable.

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